Asian stock markets on Friday followed Wall Street lower after rising US bond yields dampened buying enthusiasm driven by the US Federal Reserve’s promise of low interest rates.
Taipei, Shanghai, Tokyo, Hong Kong and Sydney retreated.
Overnight, Wall Street’s benchmark S&P 500 index closed down 1.5 percent, putting it on track for its first weekly loss in three weeks. Stocks slipped after bond yields rose, which can prompt investors to shift money out of stocks.
A day earlier, the S&P 500 hit a new high after the Fed promised to keep its key interest rate near zero through 2023 even as it forecast inflation would pick up.
“The rapid rise in long-end US yields has spooked investors,” AxiCorp Financial Services Pty chief global markets strategist Stephen Innes said.
The sell-off “caught some investors wrong-footed” after the Fed’s pledge, he said.
The MSCI Asia-Pacific Index on Friday lost 0.65 percent to 208.49 points, but rose 0.3 percent for the week.
The TAIEX on Friday lost 1.3 percent to 16,070.24 points, down 1.1 percent weekly.
The Shanghai Composite Index sank 1.7 percent to 3,404.66 points, down 1.2 percent for the week.
The Nikkei 225 in Tokyo lost 1.4 percent to 29,792.05 points, paring its weekly gain to 0.25 percent. The TOPIX on Friday inched up 0.2 percent, bringing its weekly gain to 3.13 percent.
Hong Kong’s Hang Seng Index on Friday retreated 1.4 percent to 28,990.94 points, up 0.9 percent weekly.
The KOSPI in Seoul on Friday shed 0.9 percent to 3,039.53 points, down 0.5 percent for the week.
Sydney’s S&P/ASX 200 on Friday gave up 0.6 percent to 6,708.20 points, ending the week down 0.9 percent.
India’s SENSEX on Friday gained 1.3 percent, but was down 1.8 for the week.
Also on Friday, the Bank of Japan left its easy monetary policy and goal of 2 percent inflation unchanged, but widened the band in which long-term interest rates would be allowed to rise or fall around its target to 0.25 percent from 0.2 percent.
Investors are swinging between hopes the rollout of COVID-19 vaccines would allow global business and travel to resume, and fears of possible inflation caused by government stimulus spending and easy credit.
Additional reporting by staff writer
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